Top Systems Integrators Report 2022: Taking on the Elephant in the Room

There’s an elephant in the room. It is large and looming and most certainly impacting this year’s top security integrators. But unlike that particular metaphorical expression, everyone is talking about this one — supply chain shortages. Of course, supply chain issues can be directly tied to fallout from the ongoing issue of COVID-19, the “great resignation,” and inflation, all of which were top of mind in this year’s responses to the 27th annual Top Systems Integrators Report survey.

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“The biggest issues we had in 2021 were the continuance of COVID-19 restrictions such as illness, quarantine, and vaccinations,” writes TRL Systems Inc., ranked No. 24. “Also our industry is currently dealing with manpower issues. We have seen a reduction in qualified applicants across the board for field and project management personnel. Last but not least has been the economy; we are ALL having issues with cost due to our current supply chain mess in the world. We have seen two price increases in one year from our manufacturers as well as pricing surcharges. This has all had an impact on our profitability.”

No. 28 Dallas Security Systems Inc. & DSS Fire echoes that sentiment: “Supply chain issues are bad. We sell jobs, then have to wait for parts. Customers get impatient, as you can imagine.  Also, it is very difficult to find new employees. We still have most all of our lead techs but really new rookie helpers that we train to be lead techs. No one wants to work!”

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Both in relation to 2021 and in predictions for the remainder of 2022 (surveys were conducted in March 2022), these same themes came up again and again in the comments.

“Supply chain issues seem to be the biggest barrier right now and into the foreseeable future for 2022,” writes No. 82, Custom Alarm. “In addition to supply chain issues, the continued increases in prices and surcharges and tariffs make it challenging to accurately and profitably quote and sell jobs. This continues to be a big pain point in that we not only find it difficult to get product, but the manufacturers continue to impose price increases numerous times a year even on previously placed orders. This is extremely frustrating.”

In spite of these barriers, this year’s Top Systems Integrators Report numbers tell a story of the resilience and resourcefulness of the security industry in general and these security integrators in particular.

As a whole, the top 100 systems integrators regained in 2021 much of integration revenue they lost in 2020, rebounding to a collective $4.48 billion in revenues — a 10 percent increase after a 12 percent decline last year — only 3 percentage points off their pre-pandemic 2019 numbers. And this was without revenue counted from Securitas (ranked No. 3 in 2021), which elected not to report this year due to its ongoing acquisition of Stanley. Others made up the difference, however, with both Pye-Barker and Cook and Boardman reporting for the first time as parent companies for a number of security integrators they have acquired in the last year, including several former top 100 companies. CTSI also moved far up the ranks, reflecting its acquisition streak in 2021 and 2022.

In spite of concerns about employee shortages, this year’s top integrators also employed more full-time workers than they did in either 2019 or 2020 — with a collective 43,204 employees compared to 36,783 in last year’s report.

Strategic Security Solutions, ranked No. 54, is one company that ramped up its hiring last year. “We have continued to see growth internally, including additional resources and manpower. We staffed up and capitalized on key personnel hires to help us fuel this growth going forward. Sales and operations have experienced growth, and valued training has helped build a solid foundation for our new hires. We have defined processes for streamlined project management, sales team development, internal back office processes and daily processes.”

Profits in 2021 also remained identical to 2020 numbers, and very close to 2019, in spite of inflation and rising costs, although at least one top integrator acknowledged this came at a price.

“We did a restructuring and refocusing of the business and raised rates even though the market was soft,” writes Netronix, ranked No. 9.

Given all this, it is not surprising that despite predictions of ongoing challenges, confidence remains high, with nearly 80 percent of companies predicting 2022 revenues will increase. Just 2 percent are predicting a decrease.

One reason for that might be that while supplies and labor may be a bump in the road, customer demand, new technology adoption, and project sales seem to be full speed ahead.

“In 2021 we were most proud to expand our technology offering to our existing and new client base,” writes Unlimited Technology, ranked No. 8 and SDM’s 2021 Systems Integrator of the Year. “We expanded our audio/visual and network technology offerings as well as bundling our security solutions with AI offerings and enhanced cybersecurity.”

Customers & Technology

When it comes to technology, cyber and AI are two of the top trends driving security integration business forward, along with cloud, mobile credentials, security as a service, and others.

For Integrated Security Technologies Inc., ranked No. 10, cyber security is at the top of its customer demands, followed by technologies that help them get back to work: “Cybersecurity tops the list. Ensuring systems are deployed in a manner in which they are ‘hardened’ and compliant with IT infrastructure policies is paramount. … Second on the list would be the adjustments in the workplace, as people return to a post-pandemic environment. Applying technologies such as visitor management, touchless technologies and cyber-secure technologies/services to support the remote workplace are all going to be heavily focused on by companies.”

Writing well before the most recent tragedy in Uvalde, Texas, several integrators also mentioned solutions to help with active shooter situations, from gunshot detection to AI.

“I believe cyber-attacks and active shooter attacks will be top of mind for businesses and safety personnel,” writes Darren Crawford, PSP, vice president and general manager commercial and national accounts for No. 47, Guardian Protection. “Our industry must do a better job to help prevent and mitigate the damage done by these events and drive technology that supplies our first responders with real-time communication and video that expedites neutralization of the threat and helps render aid to the wounded more quickly. I believe regulatory agencies such as OSHA’s General Duty Clause will drive more businesses to take steps to protect against an active shooter situation. Early gunshot detection is available, and I believe we’ll see more of these systems deployed. Artificial Intelligence (AI) companies are working to enhance early warning video detection of the presence of a gunman — prior to the first shot. I believe the industry should and will deploy more early warning systems and also help facilitate the inclusion of tactical casualty care training into active attack response planning so that personnel are better equipped to administer aid to the wounded.”

But because many of these technologies can be both difficult and expensive to supply right now, technology advances go hand in hand with managing customer expectations and maintaining those relationships.

No. 37 D/A Central writes, “AI is starting to supplant analytics; we need to pay attention to that. [But] inflation is going to be very difficult, especially managing existing contracts.”

Several top integrators also touted managed and hosted service offerings as a key ingredient to success in 2021 and beyond.

For example, No. 15 RFI Communications & Security Systems writes, “Supply chain will remain a major factor in 2022. Integrators will have to work closely with their customers on supply lead time. In some cases, due to time sensitivity, customers may need to move forward with a secondary or sometimes even a third product of preference than initially expected in order to comply with timelines. Additionally, the work-from-home/hybrid office shift will continue to result in more consolidation of office space and reduction in system size of many of our large campus systems, which may never return to the pre-pandemic levels we knew prior to 2020. Integrity and reliability of these systems will be paramount, which is where managed services can show their value. Cyber-threats will continue to grow, and manufacturers and integrators will have to work harder to ensure their practices and system deployments are properly secured.”

For No. 77 Watchmen Security Services LLC, it still comes down to the bread and butter of the security integrator, however: making systems work together. “Technologies working together will have the biggest impact on business in 2022 — having biometrics, video integration, cloud, wireless, touchless access, mobile credentials, building automation, etc., all working on the same platform in an easy to use way for the end user.”

Top 2022 Systems Integration Projects

A number of companies from the 2022 SDM Top Systems Integrators Report shared their most successful projects from 2021. Here are a some of the projects that helped these companies achieve their top-ranked status.

Integrated Security Technologies Inc., ranked, No. 10, was awarded a large federal government agency contract task order for the upgrade/migration of their existing legacy PACS to a new FICAM/FIPS 201-2 compliant security management system platform from one of IST’s top GSA-APL-listed vendors. IST’s existing GSA Schedule contract was leveraged for this procurement. CSEIP technical management is being utilized to ensure a successful and compliant solution deployment. IST has six CSEIP project managers on staff to handle multiple large enterprise level FIP 201-2 compliant deployments such as this project. The task order scope also included cyber/IT infrastructure coordination to adhere to the agency’s IT policies including assessment, mitigation, and documentation tasks associated with obtaining an Authority to Operate (ATO) on the federal government’s network infrastructure for the new compliant system. The PACS upgrade included 127 sites across the United States. IST’s program management office was leveraged to centrally manage the expansive footprint of sites utilizing a combination of IST technical staff along with strategic partners to provide “boots on the ground.” The multi-million dollar task order, which is still underway, has a one-year period of performance.        

RFI Communications & Security Systems, ranked No. 15, was presented a business challenge in early 2020 from an existing healthcare client in reference to patient monitoring and care. With patient care and staff shortages at an all-time high, RFI was asked to find a solution allowing current staff to monitor and communicate with multiple patients from a central location.   Requirements included using common off-the-shelf products, approved for patient care areas; having a mobile and fixed in-room application; the ability for two-way communication and viewing in Health Connect application; wireless and hardwire network connectivity options; fixed and PTZ camera options; no OSHPD engineering/design expense;  in-room application designed with established OSHPD-approved equipment; and the design must be approved for implementation within 90 days with a $4,000 budget per unit. RFI management and engineers had multiple meetings with all key stakeholders to further understand the desires and challenges with deployment of mobile and/or in-room solutions for each business unit in the region. Upon design approval, RFI provided a mobile prototype and installed 12 in-room applications for onsite testing within 90 days. With all design, functionality and budget requirements met, RFI overcame supply chain issues and is currently deploying over 400 units throughout the region. With the client recognizing the return of this investment, the client anticipates another 200-400 units will be deployed over the next 18-24 months and is now requesting an ongoing service agreement to support deployment for the next five years.

TRL Systems Inc., ranked No. 24, upgraded the Los Angeles Union Station in 2021. This $1.3 million project included access control and video management system upgrades to newer technology, including the addition of cameras and readers. TRL used a consultant general specification as well as its engineering team along with management to develop the correct solution, including solutions from both Lenel and Genetec. There were a lot of design and deployment questions due to the nature of this historic site that required TRL’s expertise in order to have a successful deployment. This project was 80 percent complete as of March 2022 with a final completion targeted for June 1.          

Guardian Protection, ranked No. 47, completed a project for a large multi-site customer who was seeking protection for the perimeter of the facilities but also had a specific need to monitor refrigerated coolers inside the facilities. The customer wanted to be alerted whenever a facility had an abnormal temperature condition. The Guardian team worked on several options but ultimately supplied this customer with a complete intrusion detection system and deployed a solution that provided temperature alerts when a refrigerated unit was having trouble maintaining a desired temperature. Guardian’s solution also provided real-time temperature monitoring, allowing the customer to view current temperature conditions at each facility at any time through their web portal or mobile app. Guardian also configured the system to provide for pre-alerts via text messaging once a temperature reached a setpoint. This allowed for precautionary measures to take place prior to a cooler reaching a critical temperature. Guardian’s solution has provided this customer with peace of mind that their facilities are secure and that perishable items in their coolers will remain safe thanks to early alerts and remote monitoring of their cooler systems.     

KMT Systems Inc., ranked No. 78, convinced a client to go with their solution when they had no intention of that originally. North Bay Distributors asked KMT to just provide a number as a “final quote,” intending to use it as a required third quote in their already-made decision to use a national company for the installation. KMT asked for a meeting with the IT director and the operations manager to discuss the options of using a local company and a cloud-based solution from one manufacturer instead. After discussing the KMT team and the benefits of certified technicians and superior customer service from the entire team anytime they needed them, KMT quoted cloud-based access, intrusion and CCTV systems. Even though the company’s quote came in a few thousand dollars higher North Bay chose them due to their willingness to explain the differences of the product, the people on their team and the service they would be getting from KMT, both during and after the installation.

IMAGE COURTESY OF CUSTOM ALARM

 

Custom Alarm, ranked No. 82, credits both partnerships and an ongoing customer relationship for its successful project for the Mayowood Apartments housing project in 2021. Custom Alarm has had the privilege to work with Center City Housing for a number of years in order to help in providing adequate, affordable housing to all residents of Minnesota. The relationship between the statewide leader in affordable housing and Custom Alarm has grown over the last decade. Mayowood Apartments offer permanent supportive housing for 30 homeless adults who struggle with behavioral health issues. The complex showed the commitment of Olmsted County and many community partners including Custom Alarm in having to address homelessness and mental health needs in the community. They have invested real dollars to help provide the means and opportunity to help homeless find stability both mentally and physically by providing a support system and stable place to live. This project worked in similar fashion to others with Center City Housing. In late fall of 2020, the Custom Alarm team worked with the regional housing director as well as the general contractors and electrical sub-contractor in order to design a system. The first part of the process was designing a fire alarm system that would meet today’s standards and fire codes. As this building was being built from the ground up, this process was fairly simple in nature. Custom Alarm partnered with a local electrical subcontractor to pull all of the cable and install all fire devices based off its approved design. The system included a Notifier Fire Warden 100 Fire Alarm Control Panel for this building, as well as an area of rescue system from Cornell. The system monitored sprinkler points on each of the three levels, elevator smoke detectors for recall and tied in outputs for door holders. Each of the sleeping units had low frequency sounders for notification in the event of a fire, as well as horn/strobes in the corridors. Custom Alarm was able to install a Starlink wireless communicator onto the fire alarm system in order to monitor the system 24/7. Historically the company’s relationship with Center City Housing has been focused on video surveillance systems. For this project the company again looked to install an Exacqvision VMS platform that included Panasonic cameras.

However, Custom Alarm did face a road block in the beginning stages of this project. As a government project, funding came from many sources and an outside architect and engineer not familiar with what is in their other properties overlooked spec’ing the product line they have in all their other buildings. Custom Alarm worked with Center City Housing and the A&E firm and had the approved cameras added. They were higher quality, which would benefit the customer in the long run and cost more, but were worth the additional investment. Custom Alarm knew the customer’s expectations for video coverage. The complete system included 24 Panasonic 3MP indoor cameras as well as 14 Panasonic 3MP outdoor cameras connected to the Exacqvision A Series 24TB NVR. They also provided the customer with a video wall in their main reception area that entailed four WBX 24-inch monitors. It was important for the staff to have “eyes” on and around the building and property and also show visitors and residents the protection they had there keeping everyone safe and minimizing or eliminating any potential for trouble.

IMAGE COURTESY OF DFW

DFW, ranked No. 83, completed one of its largest projects since forming its large commercial division in January 2020. Prior to that a 7,000-square-foot commercial install was considered a large project for the company. DFW recently completed a commercial job that was 1 million square feet under roof with the red iron at 45 feet in the center of the building.

Advanced Security Systems, ranked, No. 88, participated in a massive infrastructure upgrade project at the College of the Redwoods. As part of this campus-wide project that has been ongoing for two years, Advanced installed new fire alarm systems in multiple buildings, bringing them up to ADA code. Additionally, the company overhauled the existing campus-wide networked systems with the Onyx Series of Notifier products, incorporating the new systems and upgrading the network speed. This project allowed the company’s California fire and life-safety technicians and apprentices the chance to fully use and/or develop their technical expertise. Throughout this project, Advanced Security worked closely with the general contractor and was able to adapt and accommodate whatever the changing needs of the project as the whole campus underwent construction. Advanced Security wrapped up its part of the project in 2021 on time and on budget.    

LOUD Security Systems Inc., ranked No. 100, was challenged to remove an existing system and install multiple integrated systems into a vast warehouse that is several hundred thousand square feet in size. As an additional challenge, this active warehouse is used to hold stock; the racking that holds the stock will be consistently moved, creating an installation that would not become irrelevant as the use of the warehouse changed. After meeting with the customer multiple times and getting a design approved, LOUD was able to successfully install a system to meet the customer’s needs, consisting of over 36 IP cameras with two recorders, 16 doors of managed access control, commercial fire and integrated intrusion. 

2022 & Beyond

The themes of supply chain and labor concerns married with customer demands for new technology show no signs of going away any time soon. Most top security integrators cite these factors as the main issues and trends that will impact their company for the rest of 2022 and beyond.

No. 19 Preferred Technologies LLC writes that last year and this year are all about “supply chain, supply chain, supply chain! We cannot conduct work without materials. The labor market is tight. Staffing will probably get worse before it gets better, as the supply chain will likely consume a significant portion of the workforce. And customers are currently accepting cost increases for both materials and labor, but their acceptance of the cost increases will likely stop soon.”

No. 95 Vortex 1 Security also sees the twin issues of inflation and supply as the top concern for 2022: “The greatest impact to our business in 2022 will be the inflation pressures from the economy. Not only does this impact our pricing but it also affects our current employees and cost of living. This is by far the biggest issue for 2022. We are still expecting to see supply chain issues throughout the year as well.”

Yet, while everyone acknowledges that the current business climate is here to stay for the foreseeable future, these top security integrators are prepared to push through and use their strengths to succeed.

“Convergint will continue to see growth in 2022 as the enterprise demand for advanced and fully integrated global security systems increases,” writes the No. 1-ranked company. “Ongoing supply chain inefficiencies will pose a challenge and systems integrators can expect to have to work around unpredictable delays. Transparent communication with customers and partners will be absolutely critical to maintaining exceptional service.”

No. 84 Security Pros LLC writes, “We have a strong team that is embedded in our culture, and they are consistently improving their departments and their processes. This increases our focus on process improvement and efficiency. With the shift in the way our clients operate and incorporate our solutions into their business operation, winning the work is not going to be our problem. Overcoming supply chain issues and ever changing technology, while keeping our cashflow in line through progressive billing, and increased client communication is going to be key to long term success.”

Given their past performance in trying times, it is a good bet that these companies will be able to do just that. As the old adage goes, “How do you eat an elephant? One bite at a time.”